Markets Today: Stocks Slightly Higher on Resilient U.S. Economy

Morning Markets

September E-Mini S&P 500 futures (ESU23) this morning are up +0.09%, and Sep Nasdaq 100 E-Mini futures (NQU23) are up +0.34%.

Stocks are slightly higher after today’s U.S. durable goods orders report indicated resiliency in the U.S. economy.

Today’s May U.S. durable goods orders report of +1.7% m/m was stronger than expectations of -0.9%. Also, capital goods orders ex-defense and ex-aircraft, a proxy for corporate capital investment, rose +0.7% m/m, stronger than expectations of +0.1% m/m.

Other U.S. economic reports due for release later this morning include April S&P CoreLogic home prices (expected +0.4% m/m and -2.4% y/y), May new home sales (expected -1.2% to 675,000), the Conference Board’s June U.S. consumer confidence index (expected +1.7 to 104.0), the June Richmond Fed index (expected +3 to -12), and the June Dallas Fed services activity index.

At the ECB’s retreat in Portugal, ECB President Lagarde today said, “It is unlikely that in the near future the central bank will be able to state with full confidence that peak rates have been reached.  Barring a material change to the outlook, we will continue to increase rates in July.” The consensus is that the ECB will raise its deposit rate by +25 bp to 3.75% at its next meeting on July 27 and that one final +25 bp rate hike to a terminal rate of 4.0% is likely by late this year.

The 10-year T-note yield this morning is up +0.4 bp at 3.725%.  The markets are currently discounting the odds at 74% for a +25 bp rate hike at the next FOMC meeting on July 25-26 and are fully anticipating that +25 bp rate hike by November.

Overseas stock markets are mixed.  The Euro Stoxx 50 is up +0.04%.  China’s Shanghai’s Composite index today closed +1.23% on some cheerleading by government-linked outlets.  Japan’s Nikkei Stock Index today closed down -0.49% for the fourth consecutive session of losses.

Pre-Market U.S. Stock Movers

Tesla (TSLA) is up +1% in pre-market trading on a rebound after Monday’s -6.1% loss on a Goldman Sachs downgrade to neutral from buy.  Tesla saw downgrades last week from Morgan Stanley, Barclays, and DZ Bank.

Meta Platforms (META) is up +1.4% after Citibank raised its price target on Meta to the highest level among Wall Street analysts.   Citibank also raised its 2024 advertising revenue projections for Meta.

Bitcoin (^BTCUSD) is up +1.85% today, reversing most of the losses seen since last Friday and consolidating below the 1-year high posted during last week’s +17% rally.  Marathon Digital (MARA), Riot Platforms (RIOT), and Bit Digital (BTBT) are all up by at least 3% this morning, while Coinbase (COIN) is up +2%.

American Equity (AEL) is up +10% after Brookfield announced a $55/share acquisition offer for the insurer.

Walgreens Boots (WBA) is down -8.2% after management reduced its full-year earnings guidance.

Eli Lilly (LLY) is up +1.8% on positive trial results from its weight-loss drug retatrutide.

Kellogg (K) is up +2.6% on an upgrade by Goldman Sachs to buy from neutral due to the company’s position as one of the few growth stories in the food sector.

Snowflake (SNOW) is up +3.2% after announcing an AI-related partnership with Nvidia.

Today’s U.S. Earnings Reports (6/27/2023)

Walgreens Boots Alliance Inc (WBA), TD SYNNEX Corp (SNX), Schnitzer Steel Industries Inc (SCHN), F45 Training Holdings Inc (FXLV), Korn Ferry (KFY), Cenntro Electric Group Ltd (CENN), Novagold Resources Inc (NG), Transphorm Inc (TGAN), AeroVironment Inc (AVAV), Jefferies Financial Group Inc (JEF).

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